There is still a significant demand for affordable negative geared property especially for ones that show a high after-tax return. We have structure a high after-tax yielding investent in affordable houses for pensioners and domestic violence victims around the Affordable Housing Act, that will show an average annual after-tax return of 41% over 3 years. This is the minimum you need to retain the investment for to qualify for thev 60% CGT discount.

With over 600,000 SMSF and many HNW individuals in Australia coupled with the volumes of overseas investors, there is no shortage of investors looking for opportunities there is a ready resale market.

Global Domes builds pensioner housing villages as per the available overview using our unique folding panel houses. The individual houses are let to pensioners at affordable rents and are made available for purchase by investors seeking a high after-tax return investment. A CHP approved charity manages the village paying the investor an annual rent of $6,500 quarterly in arrears.

A tax ruling from the ATO allows the pensioner houses to be straight line depreciated at 13% pa, which means the depreciation can be used to offset the tax liability on the income as well as some other taxable income, and a tax-deductible interest component of a loan used to lever the investment.

It is possible to negative gear the house up to a minimum of 30% by using a loan we can provide through an associate company, leaving the investor with a 70% equity stake in the house. Doing this will show annual returns well above any other type of investment as the example below shows.

Crossroads Community Care Inc, a registered charity and CHP(Community Housing Provider), will purchase the pensioner house after a min of 3 years if the investor wishes to exit the investment. This guarantees the investor a 13% capital gain by recovering the depreciation, which will be taxed at a 60% discount because the investment has been in affordable housing.

There aren’t too many investments available that can produce a geared after-tax return of up to 51.9% per year after tax. Even ungeared the houses will return up to 27..6 % pa after tax.

The investment can be viewed as being semi-government guaranteed, because the pensioner is drawing a government paid pension a portion of which is securing the rent by way of a direct debit to the CHP (Community Housing Provider) Crossroads Community Care. As it's unlikely the government will cease to pay the pension the investment can be viewed as semi=government guaranteed and pensioners are not likely to be frequent movers at these rents and living in a village atmosphere..

The opportunity is limited because there are only 20 pensioner houses available in a village and we don’t commence the next one until we have completed and let the one on hand.

                
Typical differently cladded 2-br Global pensioner houses